Indian logistics industry will be having higher investments with the passing of industry tax reforms and advancement in technology.

Advancement in digital technology will create great opportunities for logistics technology developers,supply chain and logistics transformation team.

The Government of India’s strong prominence on manufacturing and initiatives such as “Make in India” is boosting domestic production, which is strengthening the logistics industry. Concerted efforts are done by logistics company to keep pace with this growth by digitizing their solutions and offering online freight services.

This will provide visibility across the supply chain and transform it to an organized industry. Some of the advanced technologies adopted include automated storage and retrieval systems (ASRS) in warehouse and transportation, radio frequency identification (RFID) in place of bar codes, and global positioning system (GPS) for real-time tracking.

“In addition to modernization the digital wave, Indian logistics companies are in the way of change in the transition from indirect taxation to goods and service tax (GST). The simplified tax structure benefits the warehousing industry and logistics costs will be reduced by up to 2.5%,” said Senthil Kumar Subbiah, Research Analyst, Supply Chain & Logistics Transformation Practice, Frost & Sullivan. “This tax change, along with land and labor market revising, will improve the efficiency of both transportation and freight forwarding.”

Indian Logistics Industry – Growth Insights and Forecast to 2020 is part of the Supply Chain & Logistics Transformation team’s Growth Partnership Subscription. According to the study, investments in infrastructure development across all modes of transportation,implementation of GST,relaxed foreign direct investment regulations, and increased technology adoption are altering the Indian logistics industry.

Meanwhile, the increasing inflow of international logistics service providers (LSPs) are prompting third-party logistics (3PLs) and domestic LSPs to expand their focus on transportation service, warehousing and freight forwarding. This will open up opportunities for partnerships, and domestic logistics companies will have access to the modern technologies introduced by global service providers.Indian logistics services will greatly benefit from the development of transportation and logistics-related infrastructure, such as dedicated freight corridors, logistics parks, free-trade warehousing zones, port modernization, and container freight stations.

“Another major influence on the logistics industry is latest technological advances as like the ubiquitous of smart phones and internet, and the consequent rise of e-Commerce. As more than 30% of the Indian population resides in tier II and tier III cities, e-Commerce sites receive more orders from these cities,” noted Subbiah. “To provide better services to customers, e-Commerce firms who are demands bigger and more efficient warehouses, faster delivery options and improved last-mile connectivity, which translates to a plethora of business opportunities for 3PL companies and logistics startups.”

Overall, LSPs are leveraging technologies such as Big Data and cloud-based application platforms for better order fulfillment and tracking of shipments. The modernization of logistics infrastructure field and government support will go a long way in advancing the Indian logistics industry.

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